British Pound: USD/GBP (GBP=X) recovers above mid-1.32s as confidence vote fears ease
The GBP/USD pair fluctuated wildly on Monday as investors continued to react to political developments in the U.K. After advancing to its highest level since June 14 at 1.3360, the pair came under a heavy selling pressure after British PM Theresa May’s office confirmed the resignation of Foreign Secretary Boris Johnson. Following a sharp drop to 1.3188, the pair retraced a portion of its daily losses and was last seen trading at 1.3255, where it was down 0.25% on the day.
Investors remained cautious as Johnson’s resignation heightened fears of Theresa May, who met with Conservative party members, facing a challenge in the parliament. Reports after the meeting clarified that there wouldn’t a confidence vote against May and allowed the GBP to erase some of its losses.
The initial resistance for the pair aligns at 1.3320 (50-DMA) ahead of 1.3445 (Jun. 14 low) and 1.3500 (psychological level). On the downside, supports could be seen at 1.3215 (20-DMA), 1.3150 (Jun. 19 low) and 1.3050 (Jun. 28 low).
Overall, the bias in prices is: Downwards.
The projected upper bound is: 1.34.
The projected lower bound is: 1.31.
The projected closing price is: 1.32.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 22 white candles and 27 black candles for a net of 5 black candles.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 64.8987. This is not an overbought or oversold reading. The last signal was a sell 1 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 47.62. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 7 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 63. This is not a topping or bottoming area. The last signal was a buy 7 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 5 period(s) ago.
Rex Takasugi – TD Profile
FOREX GBP= closed down -0.001 at 1.325. Volume was 97% below average (consolidating) and Bollinger Bands were 43% narrower than normal.
Open High Low Close Volume___
1.326 1.326 1.325 1.325 4,934
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.32 1.33 1.36
Volatility: 10 7 9
Volume: 157,471 161,735 150,856
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
FOREX GBP= is currently 2.5% below its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of GBP= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on GBP= and have had this outlook for the last 0 periods.